The general assumption is that airlines must offer fare sales to keep their business afloat during the recession. After all, lower fares mean more people can (and, theoretically, will) fly, right?
Maybe not. The Dallas Morning News' Terry Maxon reports that a number of airline executives want to rein in the fare sales we've seen through the first half of 2009. According to US Airways Group Inc. President Scott Kirby, "I think our load factors would be lower if we had higher fares, but I think our revenues would be higher."
Execs point out that the number of leisure travelers hasn't really dropped too much this year, but the average fare those travelers pay has gone down considerably. Conversely, the number of business travelers has gone down considerably, but business fares have remained fairly even. So the logic is: Raise fares on leisure travelers, and even if the airlines lose a few they'll still be bringing in more revenue.
Of course, that's a big "if." What if the airlines lose a lot of travelers? Presumably they'd just lower fares again, but the damage could already be done.
Readers, what would you do if the airlines started raising prices, or simply cut back on the sales? What's your fare threshold these days? Let me know what you think by leaving a comment below.